How an idealistic M.B.A. used new age notions (Shared Values Thought, anyone?) to rev up an old-line business and turn a humble commodity into a premium product.
It's 9:15 on a damp Monday morning, and a dozen men have gathered in a small conference room at Redmond Minerals, a company whose central asset is a two-mile-long salt mine in central Utah, to talk strategy. There's Kyle Bosshardt, who oversees mining operations, and Boyd Jewkes, who keeps the mill humming. Sammy Bates runs the warehouse while Rusty Bastian manages overall production. Most of them wear jeans and steel-tipped work boots, thermals poking out from under their khaki cotton shirts, and dusty baseball caps, the bills frayed from heavy use.
You'd think they'd get right down to business. It's been a challenging time for the Redmond team. Colorado and Washington, two of the company's biggest markets for its highway deicing salt, were walloped by major snowstorms early in the winter season. Redmond's towering stockpiles of salt practically disappeared as state and local transportation authorities called in rush orders. For weeks, crews had been hustling around the clock in subfreezing temperatures to blast rock salt in the mine, crush it into a reddish powder at the mill, and load it on 18-wheelers. There were still back orders for 70,000 tons to fill and critical equipment repairs and manpower shortages to discuss.
But first it's time for the Shared Values Thought. That's a Redmond tradition in which an employee is asked to provide an example of how the company is living up to its principles. Every meeting begins this way, and today it's Doug Anderson's turn to share. Like others at the table, Anderson, who manages the company's office, recently received an e-mail from Rhett Roberts, Redmond's CEO, that asked several questions: Was he passionate about Redmond and what the company stood for? Was he contagiously excited about where Redmond was headed? Did he look forward to Mondays--or Fridays? "Rhett's e-mail reminded me of Thinking for a Change," Anderson says, and a few in the group nod their head. They know the book, by leadership guru John C. Maxwell, too. It's one of several business classics that are widely read among the mine's work force. Anderson recounts a story from the book about Eratosthenes, the Greek mathematician who set out to calculate the circumference of the earth by measuring the angle of elevation of the sun. His peers said he couldn't do it, but he succeeded--because he had passion, Anderson says, just like the team at Redmond this winter. In an average quarter, he points out, the mine produces about 75,000 tons of salt. In January alone, it cranked out 90,000. "It was the same guys, the same equipment," Bastian chimes in. "Like Eratosthenes, we proved it could be done."
If a shared values thought sounds suspiciously like something dreamed up by a business consultant, that's because it was. The consultant in question: Rhett Roberts. In 1992, Roberts was a 27-year-old with an M.B.A. from Brigham Young University, a few months of experience consulting, and a head full of ideas about how to boost productivity and quality, when he was approached by the family owners of Redmond Minerals. Revenue growth at the company had stalled and the family was stumped. Would Roberts come by and take a look? Roberts spent four months analyzing the mine's operations and handed Redmond's owners a report. After a few months mulling over his ideas, the family came back with another question: Would he help implement them?
Hand your company over to a consultant? Especially one with no practical experience? Many entrepreneurs would find the idea foolhardy at best; some might consider it downright suicidal. Ask most business owners and they'll tell you that consultants are full of buzzwords and concepts picked up in business school, but when it comes to actually executing their big ideas…forget it. It's like the old joke says: A consultant is someone who steals your watch and then charges you to tell you the time. In the ongoing battle between book smarts and street smarts, most entrepreneurs will tell you that street smarts always wins.
Roberts had read plenty of books by the time he was approached by Redmond. He'd absorbed the leading theories on organizational development and could speak volumes about teamwork, passion, lifelong learning, and personal development. But while those concepts are enshrined in countless new economy-style businesses, could they really be relevant at a salt mine? Mining may be the oldest of old economy endeavors--dirty, dangerous, backbreakingly arduous, offering few obvious opportunities for anything resembling professional growth or "meaning" in the workplace. Roberts knew that bold ideas had the potential to transform the mundane into the valuable, that the right strategy could turn a lackluster business into a fast-growth enterprise. Could that possibly be the case with salt, perhaps the world's humblest commodity?
Truth be told, Roberts had never much thought about running a business, let alone a mine. But as he pondered Redmond's offer, he also knew that opportunities to put ideas to the test, to take abstract notions and make them concrete, seldom present themselves. Perhaps a salt mine, of all places, was just the place to be.
Roberts, a tall, soft-spoken man of 42 who favors cargo pants and untucked shirts, is one of seven kids who grew up on a farm in rural Salina, Utah. He studied Japanese and electrical engineering as an undergrad at Brigham Young, but decided along the way that he wasn't cut out for the solitary work of an engineer. After graduation, he went straight to business school, thinking an M.B.A. would broaden his career options. It was his first real exposure to business--if you don't count selling vegetables at a roadside stand as a kid--and he gravitated toward classes in operations, finance, and organizational development. When recruiters interviewed on campus, Roberts donned a suit like everyone else and got a few job offers, but none of them seemed particularly enticing. "Some guys come out of business school with the right personality and have all the recruiters after them," he says. "That wasn't my case."
After graduation, while he pondered his next move, Roberts turned to consulting. He did mostly operational analyses, landing a couple of projects at the university and a few with small local businesses. At the same time, he continued reading the management gurus. Among the standouts: William Edwards Deming, an American statistician and the icon of the quality movement. Deming is widely credited with teaching Japanese companies about quality and aiding the country's economic recovery after World War II. His 1982 book Out of the Crisis discussed 14 management principles that he believed could save U.S. manufacturers from certain death at the hands of the Japanese. Deming argued, among other points, that quality improvement is the job of everyone at a company. And that the only way to engage everyone in the task is for managers to change the way they lead and give employees a say in how things are run.
Roberts talked up these ideas in his consulting work, but his recommendations tended to fall on deaf ears. In fact, most executives seemed insulted when he suggested that they might be part of the problem at their companies. "If that's not received well, then you know you're wasting your time," Roberts says. "That's the bane of consulting--so often, not much happens."
Roberts thought he might be headed for another dead-end consulting gig when he got a call in 1992 from Jay Bosshardt, who handled the books at Redmond. Jay's father, Milo, and uncle, LaMar, had started the business in 1960 when they were struggling to keep their family farm afloat during a severe drought. They knew the farm, located in Redmond, Utah, sat on top of a salt deposit. (According to local lore, it had been discovered by Fremont Indians who saw herds of deer licking the reddish soil.) The soil turned out to be sea salt, rich with more than 50 trace minerals that were captured in the deposit millions of years ago when the waters of an ancient sea retreated.
With nothing to lose, the Bosshardt brothers grabbed their picks and chipped away at the soil. They sold chunks of it as salt licks to local ranchers, and over time began processing salt for road deicing. On the side they launched a table salt called RealSalt. But by 1992, the business had hit a wall. Sales had been flat for five years, hovering at about $2 million annually. The Bosshardts thought their company had potential, but they didn't know how to take it to the next level.
Jay Bosshardt was also concerned about the company's future leadership. The third generation of Bosshardts was just starting to work at Redmond. Going forward, Jay worried that some family members might start expecting certain privileges just because their last name was Bosshardt. "I wanted the company to be built on correct business principles, not nepotism," he says. In 1990, Jay began urging the rest of his family to hire a manager from the outside, an idea they initially resisted. Jay kept at them, and by 1992, they agreed to his idea of asking Roberts to review their operations. Roberts knew of the family--he and one of the Bosshardt sons attended the same school as kids. But he wasn't familiar with their business and knew nothing about mining. Still, he agreed to check out their operations for a few months.
What Roberts found intrigued him. Redmond's wasn't just an ordinary salt deposit. The minerals in the salt gave it properties that competing products didn't have. But you'd never know it from the mine's marketing materials. Indeed, the company didn't even have a sales force. It relied on word of mouth to get new customers and secured contracts to supply deicing salt to state and local transportation agencies by being the lowest bidder. Roberts's advice was straight out of the new economy playbook: Position the salt as a premium product rather than a commodity. By demonstrating to customers how the chemical composition of Redmond's red salt made it superior to typical white salt, the company could charge more and stop competing on price. "It's a dilemma for most commodities--how to get out of the price-only, bid-only process," Roberts says.
Redmond certainly has stiff competition. Salt is a billion-dollar business in the United States, with more than 14,000 direct and indirect uses, according to the U.S. Geological Survey. Road deicing salt accounts for about a third of total sales and at least three companies chase every state and local government contract that is put out for bid, says Richard L. Hanneman, president of the Salt Institute, an industry group headquartered in Alexandria, Virginia. It's a highly concentrated industry. Three giants--Cargill Salt, Compass Minerals (NYSE:CMP), and Rohm and Haas (NYSE:ROH), which owns Morton Salt--control 90 percent of U.S. production, according to Hanneman. Compass, a leading supplier of deicing salt, produces 11 million tons a year in North America. Redmond, by comparison, averages 400,000 tons.
Competing with the giants would take more than a repositioning of the company's products. Pulling from Deming's principles, Roberts told the family that Redmond also needed to transform its management practices. Wages at Redmond were lower than wages at other workplaces in Sevier County, where the mine is based. And the Bosshardts' leadership style was traditional and hierarchical. Roberts proposed a radical reversal, similar to what he'd prescribed in other consulting projects: Put everyone in charge of running the business. If Redmond was going to thrive, he argued, it had to milk the potential out of every single employee, from the men running the crushers in the mill to the customer service reps taking orders over the phone. Instead of telling workers what to do, the company had to give them a voice.
After Roberts presented his ideas to the family, he did what consultants typically do: He collected his check and left. Jay Bosshardt says the family needed time to digest his suggestions and consider their next moves. Roberts hoped the family would pursue his recommendations, but he wasn't holding his breath.
Seven months later, Roberts was still unemployed and helping his dad on the farm in Salina when the phone rang. It was Jay Bosshardt, asking if he'd agree to another consulting project, this time to kick-start some of the changes he had in mind. "We didn't think we could do it on our own," Bosshardt says. "But we all saw that the company could be better." Granted, Roberts didn't have much real-world business experience, but the Bosshardts were impressed with his ideas. So much so that as Roberts's second consulting gig was winding down in the summer of 1993, they asked him to stay permanently.
One of his first moves: Develop a sales and marketing program for IceSlicer, the company's road deicing salt and its top-selling product. The company gathered data that proved IceSlicer melted ice faster and at lower temperatures than ordinary white salt and was less corrosive to steel. And because of its natural grit, it didn't have to be mixed with sand. Over the next several years, the evidence gradually won over skeptical transportation officials and pulled Redmond out of the price wars. Today the company commands $18 a ton on average for IceSlicer, plus the cost of freight, compared with $11 to $13 a ton for rival products. Roberts also moved aggressively on a geographic expansion. Until the mid-1990s, most of Redmond's sales were to about 25 municipalities, counties, and department of transportation offices in the state of Utah, and prices fluctuated wildly based on the severity of the winter weather. Then, in 1995, the company entered into a partnership with EnviroTech Services, a Colorado salt distributor that became IceSlicer's exclusive sales agent outside Utah. Almost overnight, Redmond had sales reps and distribution pipelines throughout the western United States.
As Roberts was making these changes, he was also pushing up wages at Redmond. The average is now $16 an hour, compared with a countywide average of about $13 among local employers, according to Utah's Department of Workforce Services. By 1999, it was clear that Roberts's approach was working. Sales had shot to $6.5 million. The work force had grown from 20 people to 75. Roberts wanted to keep going and seek outside financing to fuel further growth. But the Bosshardts were hesitant. "They felt more at risk as we got bigger," Roberts says. "I, on the other hand, don't like to stop."
Roberts can't recall who first suggested a buyout, but in 1999, he purchased Redmond with EnviroTech, which holds a 15 percent stake, plus about $3 million in bank loans and a $1 million loan from the Small Business Administration. As part of the deal, the Bosshardts retain the mineral rights to their land and receive a quarterly payment based on how much salt is mined and sold. After 30 years of mining, there are still more than 250 million tons down there.
Kyle Bosshardt drives his mud-splattered pickup through the wide-mouthed entrance of the mine, his office for the past 20 years. He joined Redmond right out of high school, following in the footsteps of his grandfather, LaMar, and father, Ronnie. At 300 feet below the earth's surface, the workplace is cool and dry, connected by two miles of broad, unlit tunnels that have been created by years of excavating. At the end of one tunnel, Bosshardt jumps out of his truck and shines the light on his hardhat toward a towering wall of salt. Miners had recently spent six hours drilling dozens of holes into the rock and stuffing them with 1,000 pounds of dynamite. Bosshardt points his light at a five-foot-long fuse snaking away from the wall. Once it's lit, the crew has four minutes to clear out before 1,000 tons of rock salt come raining down. Bosshardt's grandfather used to haul salt out with a horse and wagon. Today, the miners navigate the tunnels in monster 50-ton trucks that carry loads over to the mill, where it's screened and crushed.
At the mill, a layer of pinkish salt covers every surface; lick your lips and you can taste it. In his dusty coveralls and hardhat, Boyd Jewkes, the mill's team leader, surveys the rock salt clattering by on a conveyor belt and grabs a fist-size chunk. Unlike the others, it's almost clear; it glistens when he holds it up to the light. Jewkes throws it down a chute to separate it from the more dense rocks.
Clear pieces like this are crushed into RealSalt, an oddly pinkish, unrefined gourmet food salt. Sales were up 20 percent in 2006 and are expected to climb another 21 percent this year, to $3.8 million. It's the top-selling sea salt in health food stores, according to industry data, and Redmond recently inked a deal with energy bar maker Clif Bar that will make RealSalt an ingredient in some Clif Bar products. But most of the chunks of salt blasted from the mine's walls wind up on snow-covered roads--IceSlicer accounts for two-thirds of Redmond's revenue. Redmond also runs Redmond Heritage Farms, a 1,200-acre natural raw milk dairy, and Real Foods Market, a retail store in Orem, Utah, that sells the farm's products as well as other organic food. Roberts expects both ventures to break even later this year.
Redmond's revenue is projected to hit $25 million in 2007. New strategy and products have been key to that growth. But Roberts is convinced that the company's expansion would not have been possible without changes in Redmond's culture. Roberts made internal changes slowly. During his initial consulting work with Redmond, he had met with each of its 20 employees individually to get their take on the company. "I hear the question a lot, 'How do you get people to accept change?" he says. "That's a lousy question. What you're really asking is how do you get people to do things your way. No one likes to change when it's forced on them."
That said, Roberts did shake up the daily routine around Redmond. He asked each of the company's four teams to submit an operating budget for the year, and charged them with making their own decisions, upending the old, top-down approach. He ran seminars to teach everyone from miners to the sales staff about the principles of quality management. He sent hourly workers to a nearby college to study economics. Teams created their own work schedules and started meeting weekly to discuss operations.
Even these small steps proved tricky. Glen Harward, who's held various jobs in his 15 years at Redmond, recalls a few co-workers skipping the seminars and balking at Roberts's ideas. Employees were used to doing the work, not spending time on the clock talking about it. Few had ever been charged with making an important decision on the job. Managers, for their part, were unaccustomed to having their ideas challenged.
As teams gained autonomy, issues of trust arose. Instead of focusing on their own jobs, people began questioning whether other teams were working as hard as they were. Money was at stake: By the mid-1990s, Redmond had introduced profit sharing, twice a year distributing 10 percent of net profits to employees. If one team slacked off, it hurt everybody.
Roberts persisted despite occasional rises in temperature, believing that if people were recognized regularly, they'd stop the comparisons. He also organized cross-functional activities so workers from different parts of the company could get to know one another and learn to work together. That proved critical as Redmond hired more employees and the number of teams grew to its current 14.
It took time, but the new management principles led to the bubbling up of all sorts of new ideas. Last year, for example, Harward, now a production worker for RealSalt, suggested to Darryl Bosshardt, who leads the RealSalt production team, that the group begin working "four 10s"--four 10-hour shifts a week--rather than the usual five eight-hour shifts. Bosshardt was skeptical. "All I could think was that we'd miss a day of production," he says. But Harward, who spent several years working four 10s in the mine before joining the RealSalt team, made a good argument. Switching to a four-day week would cut unproductive time spent on breaks and waiting for equipment to warm up. If they ever needed a fifth day, they could work overtime on Friday. Bosshardt agreed to give it a try. Output increased. At many manufacturing companies, Roberts says, "workers on the frontlines are asked to contribute with their hands, not their minds. It's hard for people to believe that letting them leave the line, so to speak, can add value. But it pays off."
Redmond doesn't have an org chart, titles, or even job descriptions, a fact that continues to vex many Redmond employees. "I have a very autocratic personality and it's hard to let that go," says Mike Mumford, team leader for Redmond Trading, the subsidiary that markets RealSalt. Before joining Redmond in 2004, Mumford ran his own $13 million window distribution company and served 12 years as a captain in the British army. "Redmond doesn't work like the British army," he says. That's for sure. Instead of pigeonholing people into jobs, Roberts believes everyone should have the chance to stretch into new roles and learn. In fact, many people are on their second, third, even fourth job at the company. Feron Reed started in the mine a couple of years ago and now makes sales calls for the company's agricultural salt products. Aaron Gabrielson got hired as an IT expert but has also become the go-to person on corporate branding.
Not everyone is so motivated. In 2003, the company laid off 14 people after a mild winter hurt sales of deicing salt. Roberts didn't have a number in mind when he sat down with team leaders to decide whom to let go, but it was obvious to everyone that, for these workers, Redmond was never going to be more than just a job. Roberts thinks the economic pressure gave him the guts to do what should have been done anyway. If someone's heart isn't in the work, he says, it's better to let him or her go. "Figuring out how you're going to contribute takes a great deal of self-discipline," Roberts says. "For people used to structure, working here can be very uncomfortable."
Indeed, there's a joke circulating among workers that outsiders think they've joined a cult--a cult that makes them read books. No one's being brainwashed, but new employees are strongly encouraged to read business classics like Good to Great and Raving Fans. The Shared Values Thought that begins every meeting derives from a company document, a mission statement of sorts, that talks about being passionate, trustworthy, accountable, and humble.
Sometimes it can feel like employees are talking in code. When RealSalt's marketing team got together recently to discuss a job vacancy, everyone agreed with one person's suggestion that they look for a "red empathetic woman." They had all read Taylor Hartman's The Color Code: A New Way to See Yourself, Your Relationships, and Life, a book that categorizes people into one of four colors based on personality, and knew that reds are power wielders born to lead. Roberts, for the record, is a blue, which means he's quality-oriented, loyal, and at times self-righteous. Maybe that smug streak is why, as a CEO, he now shuns the profession he once embraced. "It's ironic, but I'm not interested in consultants coming in and telling me how to do things," he says, then laughs. "I don't know how to make sense of that myself."
Jennifer Gill is a frequent contributor to the magazine.